Shares in Funding Circle, the London-listed business lender, surged by 25% on Thursday after the company unexpectedly swung into profitability and upgraded its full-year forecast.

The firm, which specializes in small business credit, reported a strong first half of 2024, with net income up by 32% to £79.1 million for the six months ending 30 June.

The company saw significant growth in its lending business, with UK term loan originations rising from £471 million in the same period last year to £692 million. FlexiPay transactions also surged to £226 million, up from £90 million the year before.

As a result, pre-tax profits, excluding exceptional items, came in at £0.5 million, a sharp turnaround from the £7.4 million loss recorded the previous year.

CEO Lisa Jacobs expressed optimism, noting that the company's performance exceeded expectations. "We were profitable a half earlier than anticipated," she said, as the firm revised its guidance to project profitability for the full year, rather than just the second half.

Earlier this year, Funding Circle took strategic steps to streamline operations, selling its US division for a gain of £10 million and cutting around 120 jobs. The company also initiated a £25 million share buyback programme to boost the stock price, with plans for a second buyback of up to £25 million.

Funding Circle has reaffirmed its medium-term goals, targeting revenue growth of 15% to 20% and pre-tax profit margins of over 15%, as the company continues to deliver on its promise of being simpler, leaner, and profitable.